ISAs

NB - Legislation relating to Individual Savings Accounts (ISAs) is subject to change.

Individual Savings Accounts are available to all UK residents aged 16 or over, although this is increased to 18 for Stocks and Shares ISAs. They benefit all taxpayers, especially those paying the higher rate. You can invest via a number of components within an ISA; cash, stocks and shares to include unit/investment trusts, Open Ended Investment Companies (OEICs), Gilts (bought with at least 5 years until maturity), or any share quoted on a stock exchange recognised by HMRC. If you have a maturing TESSA you can invest the original capital (without accrued interest) into a special TESSA only ISA. This will not affect your ISA allowance in the given year.

Basically, you can invest a maximum of £10,200 into ISAs in any given tax year. They are split into two different types – Cash and Stocks and Shares. 

The Cash ISA

If you choose this option you can have a maximum of £5,100 in a Cash ISA, this may not be split between different providers. 

The Stocks and Shares ISA

If you choose this option you can have a maximum of £10,200 invested in a stocks and shares ISA - minus anything you already have invested in a cash ISA in that tax year. For example you may have £5,100 in a cash ISA and £5,100 in a stocks and shares ISA. Stocks and shares ISA’s cannot hold large amounts of cash so if you want to have a portion of your ISA allowance invested in cash you will need to have a cash ISA alongside a Stocks and Shares ISA.